nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2024‒07‒15
25 papers chosen by

  1. Graduates, Training and Employment Across the Italian Regions By Arnone, Massimo; Angelillis, Barbara; Costantiello, Alberto; Leogrande, Angelo
  2. Informal Incentives and Labor Markets By Fahn, Matthias; Murooka, Takeshi
  3. Artificial Intelligence and Worker Stress: Evidence from Germany By Koch, Michael; Lodefalk, Magnus
  4. Variable Pay and Work Hours: Does Performance Pay Reduce the Gender Time Gap? By Mehrzad B. Baktash; John S. Heywood; Uwe Jirjahn
  5. Wages and Employment in the Netherlands, 2017-2023 By Klinker, Iris; ter Weel, Bas
  6. Economic shocks and skill acquisition: evidence from a national online learning platform at the onset of COVID-19 By Ganguli, Ina; Haidar, Jamal; Khwaja, Asim Ijaz; Stemper, Samuel; Zafar, Basit
  7. The Influence of Occupational Licensing on Workforce Transitions to Retirement By Morris M. Kleiner; Yun Taek Oh
  8. Returns to Education in Australia 2001-2022 By Leigh, Andrew
  9. On Within-couple Time Allocation: Gendered Disparities in Paid Work and Housework in Europe By Alireza Sabouniha; Maryna Tverdostup
  10. The Gender Disclosure Gap: Salary History Bans Unravel When Men Volunteer Their Income By Agan, Amanda; Cowgill, Bo; Gee, Laura Katherine
  11. The Economics of Gender-Specific Minimum Wage Legislation By Marchingiglio, Riccardo; Poyker, Mikhail
  12. Health Shocks, Social Insurance, and Firms By Biro, Aniko; Boza, István; Gyetvai, Attila; Prinz, Daniel
  13. Artificial Intelligence and Entrepreneurship By Fossen, Frank M.; McLemore, Trevor; Sorgner, Alina
  14. Chambers of commerce and the business of skills By OECD; Eurochambres; ICC
  15. Union Bargaining Power and the Amenity-Wage Tradeoff By Lagos, Lorenzo
  16. Can Voluntary Adult Education Reduce Unemployment? Causal Evidence from East Germany after Reunification By Rupieper, Li Kathrin Kaja; Thomsen, Stephan L.
  17. Employment and Labor Supply Responses to the Child Tax Credit Expansion: Theory and Evidence By Diane Whitmore Schanzenbach; Michael R. Strain
  18. Industrial robots and employment change in manufacturing: A combination of index and production-theoretical decomposition analysis By Eder, Andreas; Koller, Wolfgang; Mahlberg, Bernhard
  19. The Effects of Mental Health Interventions on Labor Market Outcomes in Low- and Middle-Income Countries By Lund, Crick; Orkin, Kate; Witte, Marc J.; Walker, John; Davies, Thandi; Haushofer, Johannes; Murray, Sarah; Bass, Judy; Murray, Laura; Tol, Wietse; Patel, Vikram
  20. Advertising in Online Labor Markets: A Signal of Freelancer Quality? By Jonas Hannane
  21. A Stronger CEE for a Stronger Europe By Richard Grieveson; Mario Holzner; Thomas Wieser
  22. The impacts of COVID-19 on female labor force participation in Iran By Dang, Hai-Anh H.; Salehi-Isfahani, Djavad; Do, Minh N. N.
  23. The Gender Gap in Children’s Educational Time Investments in Informal Settlements By Michelle Escobar Carías; Nicole Black; David Johnston; Rohan Sweeney; Fiona S. Barker; Rosnaena; Syaidah Syamsul; Taniela Waka
  24. Productivity-enhancing reallocation during the Covid-19 pandemic By Lalinsky, Tibor; Meriküll, Jaanika; Lopez-Garcia, Paloma
  25. Understanding the Educational Attainment Polygenic Index and Its Interactions with SES in Determining Health in Young Adulthood By Bolyard, Atticus; Savelyev, Peter A.

  1. By: Arnone, Massimo; Angelillis, Barbara; Costantiello, Alberto; Leogrande, Angelo
    Abstract: In this article, we analyze the relationships that connect graduates from high school, the training system and employment rates and conditions in the Italian regions between 2004 and 2022. The data used refer to the Istat Bes database. The results show that the growth in the number of high school graduates is positively associated with higher university education and employment with the exception of job satisfaction. Subsequently we also present a clusterization with k-Means algorithm confronting the Silhouette Coefficient with the Elbow Method. Finally, we confront seven different machine-learning algorithms for the prediction of the level of graduated from high school. We also present economic policy suggestions to increase schooling in the Italian regions. The results are critically discussed.
    Keywords: Labor Force and Employment, Human Capital, Occupational Choice, Job Satisfaction, Wage Differentials, Public Policy.
    JEL: J21 J24 J28 J31 J38
    Date: 2024–06–01
  2. By: Fahn, Matthias (University of Linz); Murooka, Takeshi (Osaka University)
    Abstract: This paper investigates how labor-market tightness affects market outcomes if firms use informal, self-enforcing, agreements to motivate workers. We characterize profit-maximizing equilibria and show that an increase in the supply of homogenous workers can increase wages. Moreover, even though all workers are identical in terms of skills or productivity, profit-maximizing discrimination equilibria exist. There, a group of majority workers are paid higher wages than a group of minority workers, who may even be completely excluded. Minimum wages can reduce such discrimination and increase employment. We discuss how these results relate to empirical evidence on downward wage rigidity, immigration, the gender pay gap, and credentialism.
    Keywords: informal incentives, labor supply, immigration, wage discrim- ination, minimum wage
    JEL: D21 D86 J21 J38 J61 J71
    Date: 2024–06
  3. By: Koch, Michael (The Ratio Institute); Lodefalk, Magnus (The Ratio Institute)
    Abstract: We use individual survey data providing detailed information on stress, technology adoption, and work, worker, and employer characteristics, in combination with recent measures of AI and robot exposure, to investigate how new technologies affect worker stress. We find a persistent negative relationship, suggesting that AI and robots could reduce the stress level of workers. We furthermore provide evidence on potential mechanisms to explain our findings. Overall, the results provide suggestive evidence of modern technologies changing the way we perform our work in a way that reduces stress and work pressure.
    Keywords: Artificial intelligence technologies; Automation; Task content; Skills; Stress
    JEL: I31 J24 J28 J44 N34 O33
    Date: 2024–06–14
  4. By: Mehrzad B. Baktash; John S. Heywood; Uwe Jirjahn
    Abstract: Using German survey data, we show that performance pay is associated with a substantially lower gender hours gap. While performance pay increases the work hours of both men and women, the increase is much larger for women than for men. This finding persists in worker fixed effects estimates. We argue our finding likely reflects differences in household production and specialization by gender. Thus, we show that performance pay is not associated with hours increasing for men with children in the household. Yet, performance pay is associated with a very large increase in hours for women with children in the household.
    Keywords: Performance Pay, Contracted Hours, Actual Hours, Gender
    JEL: D10 J22 J33 M52
    Date: 2024
  5. By: Klinker, Iris (SEO Amsterdam); ter Weel, Bas (SEO Amsterdam)
    Abstract: This research documents changes in employment and wages in the Netherlands for different types of workers. We compare 2017 to 2023 using regression-adjusted wages to make sure changes in composition of the workforce do not influence our estimates. The research period has been characterised by high labour demand, negative supply shocks, high levels of inflation and economic lockdowns, all of which have contributed to substantial labour-market dynamics. Our findings suggest that employment has been growing by 2 percent in the period 2017-2023, of which 1.8 percent has been due to additional workers finding employment. Women have experienced the largest increase in employment, while the employment of men on temporary contracts has slightly fallen. Wages have been rising for workers at the bottom of the wage distribution. From the median of the wage distribution onwards real gross hourly wages have been fallen. The most likely explanation for rising wages at the bottom is the stepwise increase in minimum wages enforced by new labour-market legislation.
    Keywords: employment, inflation, wages, COVID-19
    JEL: E24 E31 J21 J31
    Date: 2024–06
  6. By: Ganguli, Ina; Haidar, Jamal; Khwaja, Asim Ijaz; Stemper, Samuel; Zafar, Basit
    Abstract: We study how large shocks impact individuals’ skilling decisions using data from a large, government-sponsored, online learning platform in Saudi Arabia. The onset of the COVID-19 pandemic brought about a massive increase in online skilling, and demand shifted towards courses that offered skills, such as telework, likely to be immediately valuable during the pandemic. Consistent with a model where individuals trade off reskilling costs with their expectations of future labor market conditions and their duration of work, we find that shifts into telework courses were largest for older workers. In contrast, younger workers increased enrollments in courses related to new skills, such as general, occupation-specific, and computer-related skills. Using national administrative employment data, we provide descriptive evidence that these investments in skills in early 2020 helped users maintain employment over the course of the pandemic.
    Keywords: Education; Human capital; Online learning; Telework; COVID-19
    JEL: I1 I2 I25 I26 J0 J22 J24
    Date: 2024–06–03
  7. By: Morris M. Kleiner; Yun Taek Oh
    Abstract: Ways of leaving the labor force has been an understudied aspect of labor market outcomes. Labor market institutions such as occupational licensing may influence how individuals transition to retirement. When and how workers transition from career jobs to full retirement may contribute to pre- and post-retirement well-being. Previous investigations of retirement pathways focused on the patterns and outcomes of retirement transitions, yet the influence of occupational licensing on retirement transition has not been analyzed. In this study, we use the Current Population Survey and Survey of Income and Program Participation to investigate how occupational licensing influences American later-career workers’ choice of retirement pathways. Our results show that licensed workers are less likely to choose to change careers but more likely to reduce work hours in transitioning out of the workforce. These results are consistent with the findings that licensed workers receive more benefits in the form of preferable retirement options, suggesting that these workers tend to have higher wages, benefits, and flexibility even toward the end of their careers.
    Keywords: Public policy; Retirement plans; Occupational licensing
    JEL: J44 J32 J48
    Date: 2024–04–17
  8. By: Leigh, Andrew (Parliament of Australia)
    Abstract: What are the economic returns to education in Australia? Using data from the 2018-2022 waves of the Household, Income and Labour Dynamics in Australia survey, and taking account of existing estimates of ability bias and social returns to schooling, I estimate the economic return to various levels of education. As in Leigh (2008), which used data from the 2001-2005 waves of the same survey, I report large returns. Across high school, vocational education and university qualifications, an additional year of schooling raises hourly wages by 7 percent, boosts annual earnings by 13 percent, and increases the probability of reporting positive earnings by 4 percentage points. In terms of hourly wages, the largest per-year returns are from completing a Bachelor degree. In terms of annual earnings, the largest per-year returns are from completing year 12. Testing for changes in returns to schooling over time provides little evidence of systematic trends over the period 2001-2022. Over the lifecycle, returns to education tend to decline from age 60 for high school and vocational qualifications, and tend to decline from age 55 for university qualifications, suggesting that the value of education diminishes as workers approach retirement age.
    Keywords: returns to education, ability bias, high school, vocational training, university
    JEL: I28 J31
    Date: 2024–05
  9. By: Alireza Sabouniha (The Vienna Institute for International Economic Studies, wiiw); Maryna Tverdostup (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper aims to pursue a deeper understanding of gendered within-couple allocation of time into paid work and housework in heterosexual dual-earner couples. Relying on the second wave of Harmonised European Time Use Survey (HETUS) data for 10 European countries, we estimate spousal relative worktime and housework to analyse within-couple time-use arrangements. The results show that the disparity between a wife’s and a husband’s workhours is gradually narrowing, yet housework remains firmly gendered even in couples in which the wife works more hours than the husband. We document strong inertia in the wife’s share of housework. Although it decreases as her labour market commitment increases, the decline is slow. In addition, even if it is approaching a gender-equal split, the within-couple division of housework barely passes the point at which the husband’s contribution to housework surpasses that of his wife. These results suggest that gendered time division aligns broadly with traditional theories of the household, yet the role of the ‘doing-gender’ hypothesis is non-negligible.
    Keywords: paid work; unpaid work; gender gap; intra-family decisions; labour market outcomes; European countries
    JEL: D10 J16 J22 J24
    Date: 2024–06
  10. By: Agan, Amanda (Cornell University); Cowgill, Bo (Columbia Business School); Gee, Laura Katherine (Tufts University)
    Abstract: This study investigates whether the success of salary history bans could be limited by job-seekers volunteering their salaries unprompted. We survey American workers in 2019 and 2021 about their recent job searches, distinguishing when candidates were asked about salary history from when they were not. Historically well-paid workers may have an incentive to disclose, and employers who are aware of this could infer that non-disclosing workers are concealing low salaries. Through this mechanism, all workers could face pressure to avoid the stigma of silence. Our data shows a large percentage of workers (28%) volunteer salary history, even when a ban prevents employers from asking. An additional 47% will disclose if enough other job candidates disclose. Men are more likely than women to disclose their salaries unprompted, especially if they believe other candidates are disclosing. Over our 1.5-year sample covering jurisdictions with (and without) bans, unprompted volunteering of salary histories increased by about 6-8 percentage points.
    Keywords: voluntary disclosure, information economics, organizations, hiring, compensation, inequality, salary history bans, statistical discrimination
    JEL: D8 M51 J71
    Date: 2024–06
  11. By: Marchingiglio, Riccardo (Northwestern University); Poyker, Mikhail (University of Texas Austin and University of Nottingham)
    Abstract: Using full count U.S. census data, we study the impact of early 20th-century state-industry-specific minimum wage laws that primarily targeted female employees. Our triple-difference estimates suggest a null impact of the minimum wage laws, potentially reflecting disemployment effects and the positive selection bias of the workers remaining in the labor force. When comparing county-industry trends between counties straddling state borders, female employment is lower by around 3.1% in affected county-industry cells. We further investigate the implications for own-wage elasticity of labor demand as a function of cross-industry concentration, the channels of substitution between men and women, and heterogeneity by marital status.
    Keywords: minimum wage, labor demand, gender gap, labor markets
    JEL: J16 J23 N32
    Date: 2024–05
  12. By: Biro, Aniko (Centre for Economic and Regional Studies); Boza, István (Central European University, Budapest); Gyetvai, Attila (Banco de Portugal); Prinz, Daniel (World Bank)
    Abstract: We study the role that firms play in social insurance benefit uptake after their workers experience health shocks. Social insurance in our setting, Hungary, is universal and comprehensive, thus allowing us to quantify the heterogeneous impact of firms on benefit uptake and labor market outcomes on top of the social safety net. Using matched employer-employee administrative data linked to individual-level health records, we find that firm responses to worker health shocks are heterogeneous. Workers hit by a health shock at high-quality firms are less likely to take up disability insurance or exit the labor force than those at low-quality firms. These empirical patterns are consistent with worker-firm match quality increasing in firm quality in a setting where recovery from health shocks is uncertain. Our results imply that beyond higher wages, high-quality firms also offer more protection against the consequences of health shocks. This suggests that heterogeneous firm behavior should be taken into account when designing social insurance policies.
    Keywords: health shock, disability insurance, firm heterogeneity
    JEL: H55 I10 J22 J23
    Date: 2024–06
  13. By: Fossen, Frank M. (University of Nevada, Reno); McLemore, Trevor (University of Nevada, Reno); Sorgner, Alina (John Cabot University)
    Abstract: This survey reviews emerging but fast-growing literature on impacts of artificial intelligence (AI) on entrepreneurship, providing a resource for researchers in entrepreneurship and neighboring disciplines. We begin with a review of definitions of AI and show that ambiguity and broadness of definitions adopted in empirical studies may result in obscured evidence on impacts of AI on en-trepreneurship. Against this background, we present and discuss existing theory and evidence on how AI technologies affect entrepreneurial opportunities and decision-making under uncertainty, the adoption of AI technologies by startups, entry barriers, and the performance of entrepreneurial businesses. We add an original empirical analysis of survey data from the German Socio-economic Panel revealing that entrepreneurs, particularly those with employees, are aware of and use AI technologies significantly more frequently than paid employees. Next, we discuss how AI may affect entrepreneurship indirectly through impacting local and sectoral labor markets. The reviewed evidence suggests that AI technologies that are designed to automate jobs are likely to result in a higher level of necessity entrepreneurship in a region, whereas AI technologies that transform jobs without necessarily displacing human workers increase the level of opportunity entrepreneurship. More generally, AI impacts regional entrepreneurship ecosystems (EE) in multiple ways by altering the importance of existing EE elements and processes, creating new ones, and potentially reducing the role of geography for entrepreneurship. Lastly, we address the question of how regulation of AI may affect the entrepreneurship landscape by focusing on the case of the European Union that has pioneered data protection and AI legislation. We conclude our survey by discussing implications for entrepreneurship research and policy.
    Keywords: artificial intelligence, machine learning, entrepreneurship, AI startups, digital entrepreneurship, opportunity, innovation, entrepreneurship ecosystem, digital entrepreneurship ecosystem, AI regulation
    JEL: J24 L26 O30
    Date: 2024–06
  14. By: OECD; Eurochambres; ICC
    Abstract: In today's rapidly evolving economy, businesses are facing growing challenges in recruiting workers with the right skills. Chambers of commerce can play an important role in helping communities tackle these pressing issues and building skills systems that are fit for the future. This paper draws on a 2024 survey undertaken by the OECD in collaboration with Eurochambres and International Chamber of Commerce, covering chambers from 65 countries. It explores the role chambers play in shaping and implementing skills policies at local, regional and national levels. Common approaches include supporting strategy development at both national and regional/local levels; serving as an intermediary between businesses and skills programmes; and, at least to some degree, being a direct provider of training themselves. As demands for agile and inclusive skills systems grow, this paper serves as a first step to explore how chambers can further support skills agendas.
    Keywords: Chambers of Commerce
    JEL: J24
    Date: 2024–06–26
  15. By: Lagos, Lorenzo (Brown University)
    Abstract: This paper studies the relation between the wage and amenity components of compensation under collective bargaining. Using the universe of collective bargaining agreements (CBAs) in Brazil, I augment information on workers' wages with the comprehensive set of amenities codified in the text of these contracts. I then estimate the effects of increasing union bargaining power with a difference-in-difference strategy that leverages 1) a judicial decision that prevented the expiration of existing CBA provisions—a policy known as ultractivity—and 2) gaps in CBA coverage across establishments when the policy was enacted. I find that boosting union power causes an increase in both wages and CBA clauses without a subsequent decrease in employment. A revealed preference approach to estimating the wage-equivalent value of negotiated clauses shows that amenity value also increases, comprising approximately 45% of workers' total gains in compensation. Results are consistent with collective bargaining functioning as a labor market institution that counters monopsony power, but where employers retain the right-to-manage the composition of their workforce.
    Keywords: collective bargaining, unions, amenities, compensating differentials
    JEL: J52 J32 J42 K31
    Date: 2024–05
  16. By: Rupieper, Li Kathrin Kaja; Thomsen, Stephan L.
    Abstract: After the German Reunification in 1990, East Germany transitioned from a centrally planned economic system to a market economy. To tackle surging unemployment, upskilling through adult education was deemed essential at the time. Besides substantial mandatory training programs provided by active labor market policies, Volkshochschulen (VHS) were the most important providers of voluntary adult education. Based on newly digitized data, we estimate how VHS courses affected unemployment in a county-level analysis of East Germany between 1991 and 2002. Our identification strategy employs the decentralized expansion of courses, which led to substantial, quasi-random variation in their regional supply. We do not find any significant effects of VHS courses on subsequent unemployment. Lacking labor demand and low market dynamics may have restricted the realization of education effects. Regional disparities support this notion: In counties bordering West Germany, we find that courses did reduce unemployment. Our results hint towards multiple mechanisms at play, as both work-related and recreational courses were found to be effective in border counties.
    Keywords: unemployment, adult education, non-formal education, Volkshochschule, East Germany
    JEL: I21 J24 N34 P20 P36
    Date: 2024–06
  17. By: Diane Whitmore Schanzenbach; Michael R. Strain
    Abstract: The 2021 Child Tax Credit (CTC) expansion increased government benefits to families, and especially to families with the lowest incomes. Economic theory predicts that this policy intervention would have led to a reduction in labor supply among adults in those families. Our review of available research suggests that employment within broadly defined demographic groups was not reduced by the 2021 CTC changes. However, we present evidence that employment was reduced among mothers with relatively low levels of education — the demographic group that was most affected by the CTC expansion. For the 2021 CTC expansion, theory and evidence were in the strongest alignment when the research design that produced the evidence was most focused on the demographic groups most likely to be affected by the expansion.
    JEL: J2
    Date: 2024–06
  18. By: Eder, Andreas; Koller, Wolfgang; Mahlberg, Bernhard
    Abstract: This paper investigates the contribution of industrial robots to employment change in manufacturing in a sample of 17 European countries and the USA over the period 2004 to 2019. We combine index decomposition analysis (IDA) and production-theoretical decomposition analysis (PDA). First, we use IDA to decompose employment change in the manufacturing industry into changes in (aggregate) manufacturing output, changes in the sectoral structure of the manufacturing industry, and changes in labour intensity which is a composite index of labour intensity change within each of the nine sub-sectors of total manufacturing. Second, we use PDA to further decompose labour intensity change to isolate the contribution of technical efficiency change, technological change, human capital change, change in non-robot capital intensity and change in robot capital intensity to employment change. In almost all of the countries considered, the labour intensity is falling in entire manufacturing, which has a dampening effect on employment. Robotisation contributes to this development by reducing labour intensities and employment in all countries and sub-sectors, though to varying degrees. Manufacturing output, in turn, grows in all countries (except Greece, Spain and Italy), which increases employment and counteracts or in some countries even more than offsets the dampening effect of declining labour intensities. The structural change within manufacturing has an almost neutral effect in many countries.
    Keywords: automation; robotisation; decomposition; structural change; data envelopment analysis
    JEL: C43 J21 J24 O33
    Date: 2024–06–04
  19. By: Lund, Crick (King's College London); Orkin, Kate (University of Oxford); Witte, Marc J. (Vrije Universiteit Amsterdam); Walker, John (University of Oxford); Davies, Thandi (University of Cape Town); Haushofer, Johannes (Stockholm University); Murray, Sarah (John Hopkins University, Baltimore); Bass, Judy (Johns Hopkins University); Murray, Laura (John Hopkins University, Baltimore); Tol, Wietse (University of Copenhagen); Patel, Vikram (Harvard University)
    Abstract: Mental health conditions are prevalent but rarely treated in low- and middle-income countries (LMICs). Little is known about how these conditions affect economic participation. This paper shows that treating mental health conditions substantially improves recipients' capacity to work in these contexts. First, we perform a systematic review and meta-analysis of all randomized controlled trials (RCTs) ever conducted that evaluate treatments for mental ill-health and measure economic outcomes in LMICs. On average, treating common mental disorders like depression with psychotherapy improves an aggregate of labor market outcomes made up of employment, time spent working, capacity to work and job search by 0.16 standard deviations. Treating severe mental disorders, like schizophrenia, improves the aggregate by 0.30 standard deviations, but effects are noisily estimated. Second, we build a new dataset, pooling all available microdata from RCTs using the most common trial design: studies of psychotherapy in LMICs that treated depression and measured days participants were unable to work in the past month. We observe comparable treatment effects on mental health and work outcomes in this sub-sample of highly similar studies. We also show evidence consistent with mental health being the mechanism through which psychotherapy improves work outcomes.
    Keywords: labor, development, human capital, mental health, psychotherapy
    JEL: D9 I14 O1 J24
    Date: 2024–06
  20. By: Jonas Hannane
    Abstract: Freelancers face cold-start problems in online labor markets: getting hired is very difficult without ratings, while obtaining a rating is impossible unless already having been hired. According to economic theory and empirical evidence, advertising can serve as a signal of product quality for experience goods. As such, advertising might help skilled new freelancers without reputation on a platform to obtain a first job, by providing a quality signal to employers. This study empirically explores the role of advertising in online labor markets using transactional data from a major platform. While indeed newer freelancers tend to advertise, I find that buyers dislike ads once I control for the increased visibility of ads. This negative effect is amplified for new and unrated freelancers compared to already rated freelancers. Furthermore, I find that new freelancers who advertise do not perform significantly better in the long-run compared to similar freelancers who do not advertise. Taken together, my results contrast the hypotheses derived from signaling models of advertising.
    Keywords: Online Labor Markets, Information Asymmetry, Reputation, Signaling, Informative Advertising
    JEL: M37 J40 D82
    Date: 2024
  21. By: Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw); Thomas Wieser
    Abstract: We discuss past performance and future challenges for the countries of Central and Eastern Europe (CEE). We highlight the successful convergence process of those countries, not least thanks to their integration into European and global value chains. As the external environment changes, so policies must change in order to maintain the momentum. A strong European Union also presupposes a strong and vibrant CEE. The policy recommendations in the areas we have covered in this contribution include national reform programmes that promote innovation, competitiveness, and transparent institutions; a larger EU budget for European public goods; shadow policies for euro accession by CEE non-euro economies; accession to the banking union by CEE non-euro countries; deepening of home/host cooperation with the assistance of the European Banking Authority to enable freer movement of capital; high-quality implementation of anti-money-laundering processes and institutions; promotion of regional cooperation in areas such as withholding tax, convergence of rules on accounting and stock exchanges in support of a regional capital market; promotion of deeper national capital markets by boosting the second and third pillars of pension systems, while retaining their pay-as-you-go systems; regional cooperation among venture capital funds, supported by the European Investment Fund; investment in science, technology, engineering, and mathematics (STEM) education and establishment of a leading university to retain talent and foster innovation; implementation of a modern industrial policy promoting infrastructure and know-how for the green and digital transformation; mitigating the demographic challenges will require a mixture of automation, greater immigration and higher participation rates; promotion of a high degree of flexibility in labour markets, in order to facilitate shifts away from sectors that are adversely impacted by the twin transition, and towards more innovative activities; education and training programs for sectors where wage convergence has made most progress, including promotion of labour mobility within CEE to overcome sectoral bottlenecks; provision of family-friendly infrastructure to encourage citizens to remain in their home countries and encourage return migration.
    Keywords: European integration, economic convergence, Central and Eastern Europe, European Union, Euro Area, growth model, financial markets
    JEL: E22 E24 F15 F21 F36 G24 H54 J24 O16 O47
    Date: 2024–06
  22. By: Dang, Hai-Anh H.; Salehi-Isfahani, Djavad; Do, Minh N. N.
    Abstract: While female labor force participation (LFP) in Iran is among the lowest in the world, there is hardly any study on the COVID-19 pandemic effects on the country's female LFP. We find that female LFP decreased during the pandemic years by around 1 percentage point in 2021 and 2022. When controlling for excess mortality rates, the declines could increase to between 3.9 and 8.7 percentage points, with the larger impacts occurring in late 2021 and early 2022. Compared to modest, pre-pandemic female LFP rates, these figures translate into 5 percent and 18-40 percent decreases, respectively. Heterogeneity exists, with more educated individuals being more likely to work. Compared to married individuals, divorcees were more likely to work while those that were divorced or never married were less likely to work. Our results offer relevant inputs for labor policy, particularly those aimed at reducing gender inequalities.
    Keywords: COVID-19, employment, women's labor force participation, differences-in-differences, triple differences, labor force survey, Iran
    JEL: E24 I30 J21 O12
    Date: 2024
  23. By: Michelle Escobar Carías (The University of Melbourne, Department of Economics); Nicole Black (Monash University, Monash Business School, Centre for Health Economics); David Johnston (Monash University, Monash Business School, Centre for Health Economics); Rohan Sweeney (Monash University, Monash Business School, Centre for Health Economics); Fiona S. Barker (Monash University, School of Public Health and Preventive Medicine, Faculty of Medicine, Nursing and Health Sciences); Rosnaena (RISE Program Indonesia); Syaidah Syamsul (RISE Program Indonesia); Taniela Waka (RISE Program Fiji)
    Abstract: We document gender differences in children’s time investments in education, labour, and leisure in an understudied population of children living in urban informal settlements. Using within-settlement and within-sibling comparisons, we find that boys spend significantly less time than girls on schooling and homework and more time on leisure activities. We also find that caregivers invest less time in helping their sons with reading and homework than their daughters. One possible explanation is that girls spend more time on domestic work. As a result, as the share of girls in the household increases, primary caregivers spend less time on domestic work and more time on other activities such as teaching children. We find that the gender gaps in time use are more pronounced among children whose parents have lower schooling and more financial constraints.
    Keywords: Gender gap, Time Use, Education, Informal Settlements
    JEL: I24 I25 I30 J22
    Date: 2024–06
  24. By: Lalinsky, Tibor; Meriküll, Jaanika; Lopez-Garcia, Paloma
    Abstract: This paper studies how the Covid-19 pandemic and the extensive job retention support that accompanied it affected productivity in Europe. The focus is on the reallocation channel and productivity-enhancing reallocation of jobs, following Foster et al., 2016. An extensive micro-distributed analysis of firm-level data for 11 euro area countries is used. The unique firm-level datasets are constructed by merging balance-sheet and income-statement data with policy support data. The paper exploits variation in employment responsiveness to productivity over time, particularly examining the relationship between changes in employment responsiveness and the job retention support in 2020 and studying how well the support was targeted by firm productivity. Acknowledging limitations of a small set of countries covered and occasionally large confidence bounds around estimates, the findings suggest that (1) productivity-enhancing reallocation was weaker in the pandemic than in the Great Recession; (2) The countries that were more generous with job retention support and countries where more support was allocated to low-productivity firms showed weaker productivity-enhancing reallocation in 2020. JEL Classification: D22, H25, J38, L29
    Keywords: adjustment of firms, Covid-19, cross-country analysis, job retention support, productivity-enhancing reallocation
    Date: 2024–06
  25. By: Bolyard, Atticus (Harvard University); Savelyev, Peter A. (Virginia Commonwealth University)
    Abstract: Based on the sample of The National Longitudinal Study of Adolescent to Adult Health (Add Health), we investigate the formation of health capital and the role played by genetic endowments, parental SES, and education. To measure genetic endowments we take advantage of the new availability of quality polygenic indexes (PGIs), which are optimally-weighted summaries of individual molecular genetic data. Our main focus is on the Educational Attainment Polygenic Index (EA PGI), which is designed to predict the highest level of education achieved in life. We find that the EA PGI demonstrates stronger effects on health and health behaviors for subjects with high parental socioeconomic status (SES). These effects are only partially explained by education as a mechanism. We provide suggestive evidence for the mechanisms behind estimated relationships, including early health, skills, and the parents' and child's own attitudes towards education, as well as outcomes related to occupation and wealth. We also show that a strong association between education and health survives controlling for a large set of PGIs that proxy health, skills, and home environment, with only a modest reduction in regression coefficients despite controlling for major expected confounders. This result informs the ongoing debate about the causal relationship between education and health and the confounders behind the education-health gradient.
    Keywords: health, health behaviors, Polygenic Index (PGI), Polygenic Score (PGS), Educational Attainment, parental socioeconomic status (SES), child development, education, mediators, Add Health data
    JEL: I12 I14 I24 J24
    Date: 2024–06

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